BRC-20 Tokens: A Beginner's Guide
BRC-20 is an experimental standard for issuing and transferring fungible tokens on the Bitcoin network. It relies on Ordinal inscriptions and JSON data and does not use smart contracts, so its functionality and maturity differ from ERC-20.
What Is BRC-20?
BRC-20 was proposed by the pseudonymous programmer Domo in March 2023 to create fungible tokens through the Bitcoin Ordinals protocol. Its name was inspired by ERC-20, but the two are not the same technology. The first deployed BRC-20 token was named “ordi,” and the standard remains experimental.
How It Is Created and Operates
The Ordinals protocol numbers satoshis, the smallest units of Bitcoin, and allows data to be attached through inscriptions. BRC-20 writes JSON data into Ordinal inscriptions and uses three functions—deployment, minting, and transfer—to create a token, generate a specified quantity, and complete transfers. The operations are not simple, and supporting tools and services remain limited.
Differences from ERC-20
BRC-20 is built on the Bitcoin network and does not rely on smart contracts, so it has fewer functions. ERC-20 is an Ethereum token standard that can interact with protocols and applications and supports services such as lending. ERC-20 has been used and tested for years, while BRC-20 is newer and its stability, uses, and future development remain highly uncertain.
Risks to Consider
BRC-20 remains in testing, and problems may occur during deployment, minting, or transfer. A token being easy to mint does not mean that it has a practical use or value. Concentrated demand may also raise Bitcoin transaction fees and increase network congestion. Users should understand the mechanism and verify the related risks independently before engaging with these tokens.
Original Tutorial
https://www.binance.com/zh-CN/academy/glossary/brc-20-tokens
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